NEW YORK-Moody’s Investors Service announced Oct. 2 the speculative grade ratings it assigned to $490 million in new debt securities that Rogers Cantel Inc., Canada’s largest wireless carrier, sold privately.
The rating agency assigned a Ba3 rating to $275 million in 10-year notes due in 2007 that are secured, “by substantially all the company’s assets,” and a slightly lower rating of B2 to $215 million in senior subordinated notes, also due in 2007.
The Montreal-based company provides analog cellular, personal communications services, paging and wireless data services, and today is the only company in Canada licensed to do so nationwide, Moody’s said.
The New York rating agency said it expects Cantel’s strong industry position and nationwide market share, “to result in improved cash flow and better debt protection measurements.”
However, the intermediate term will be marked by an increasingly competitive environment, “as new entrants focus on building digital networks in an effort to cut into Cantel’s market share,” said Neil P. Begley, senior analyst for the Media, Telecom & Technology Group, and Alexandra S. Parker, senior credit officer in the Corporate Finance Group.
“This will likely cause Cantel’s debt to increase as it accelerates spending on expanding digital service capability … and in marketing, principally subscriber acquisition costs.”
